Advancing a Free Society

Shovel-ready, revisited

Thursday, July 1, 2010

According to Recovery.gov, the government has now paid out $415 billion of the stimulus funds. Tax rebates account for $163 billion. Of the $252 of direct spending, the Department of Transportation has paid out $14 billion. That’s 5.5%.

Maybe it would have done more stimulating if the spending had actually been directed at projects that use shovels.

But if you’re a Keynesian, spending is spending. It’s all part of aggregate demand. Keynesians believe it’s better to do something productive with the spending but even digging ditches and filling them back in boosts aggregate demand. (I heard Joseph Stiglitz say this in response to a question during Congressional testimony.)

Continue reading Russ Roberts at Cafe Hayek